Rhode Island debt payment, budget before governor

June 28

June 28 Rhode Island Governor Lincoln Chafee is
expected to approve a $2.5 million debt service payment on bonds
used to lure former Boston Red Sox pitcher Curt Schilling's now
bankrupt videogame company to the state.

However the payment is part of the $8.2 billion budget for
fiscal 2014, which Chafee is still reviewing, his office said on
Friday. He has seven days to sign it.

The state legislature sent its spending plan to Chafee on
Thursday. The inclusion of the $2.5 million payment ends a
controversial debate on the state's willingness to pay its debt.
Some lawmakers sought to block the payment for the company,
called 38 Studios, but their efforts to strip that money from
the final budget bill failed.

The governor has said he supports making the payment.
The interest payment, which is due in May, is on $75 million of
taxable bonds that the state sold in 2010 to make a loan to 38
Studios.

The company's loan payments were originally supposed to
secure the bonds. Now the state could wind up paying $89 million
for them, according to its director of administration, Richard
Licht.

Moody's Investors Service earlier in June downgraded by two
notches its rating on the 38 Studios bonds and put $2.1 billion
of Rhode Island's debt under review for possible downgrade.